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Health Insurance: To Get or Not to Get--That's the Question

February 2008
Health Insurance: To Get or Not to Get--That's the Question

By Kirit Gandhi

Why do we need to get health insurance? The answer is very simple. To limit our financial costs and liabilities.

It is not a secret that healthcare in this country is very expensive. A routine physical exam, without insurance, can cost you hundreds of dollars. A quick trip to an emergency room can add up to thousands. Nobody can predict how our health will be in the future. Accidents happen, children get sick or hurt. With health insurance, you can limit your costs effectively, which otherwise may end up being thousands of dollars. According to the Harvard Medical School, about 50% of the bankruptcies in America are due to lack of proper health insurance.

Without health insurance, the risks are many. Medical services you get under emergency will be charged at full (non-negotiated) rates. Moreover, non-payment could result in your account being turned over to a collection agency, affecting your credit rating, which in turn can affect your future borrowing ability (for house buying, business loans, etc.). Even state run programs under Medicaid which are offered to low asset/low income people, have started using collection agencies to pursue unpaid balances. For immigrants, there is another consideration, as your sponsor (for your green card or visitor visa, etc.) is also known to be held liable for your unpaid balances.

For individual health insurance for you and your family, big, reputable companies are recommended. Beware of unknown companies that offer discount plans. They may advertise very low premiums, but they likely have limited benefits and a lot of restrictions. Any experienced insurance agent has heard a number of sob stories about such plans that have major omissions in coverage that the customer ends up being personally liable for thousand of dollars to be paid to doctors and hospitals.

The biggest risk in healthcare for the uninsured is the possibility of hospitalization due to an accident or a chronic illness such as diabetes, or more serious ones such as a heart attacks or cancer. Once the illness has been diagnosed, it often becomes difficult to impossible to get good coverage. Most of us can pay the general office visits to see a doctor (which could range from $50 to $200 and more). But hospital bills are known to be notoriously high, and can mean financial devastation for the uninsured.

What we recommend to our clients who may not be able to afford the lower deductibles is to elect a policy with a high deductible amount. A policy with a deductible in the range of $5000 to $10,000 will bring your premiums down considerably, and at the same time protect you against potential catastrophic losses from long illness and hospitalization. Remember, you can’t practice fire prevention once the fire has begun!

There are many things to consider when purchasing your health insurance, such as maternity benefits, out-of-network benefits and underwriting criteria’s of different insurance companies, etc. Some companies have more lenient underwriting than others. It is advisable to contact an agent who represents many companies. If you go direct to an insurance company, they probably won’t tell you to go to their competition for better rates or benefits; but an insurance broker can take assessment of your needs and recommend a company and a policy that suits your needs.   

Many people have a misconception that their rates will be lower if the go direct to a health insurance company. That is not true. The rate you pay when going direct to a health insurance company is the same as you would get from an agent. Additionally, you may also be able to establish a relationship with an agent as you would with your doctor, who knows your needs and can make recommendations as things change—which in the health insurance industry is on an on-going basis.

[A resident of Atlanta, Ga for more than 35 years, Kirit Gandhi is in the business of Life and Health insurance, for individuals as well as groups. He can be reached at 770-451-1932-Ext 103 or Kirit@shalinfinancial.com]

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